U.S. stock futures experienced significant declines on Friday, poised to extend Wall Street’s largest sell-off in over a month as diminishing expectations for an interest-rate cut in December weigh heavily on riskier assets, particularly in the technology sector.
Futures for the Dow Jones Industrial Average fell approximately 0.6%, while the S&P 500 saw a drop of nearly 1%. The tech-heavy Nasdaq 100 futures plunged around 1.5%. This downward trend follows a rough trading session on Thursday, during which major indexes recorded their steepest one-day drops in more than a month.
Once again, technology stocks are at the forefront of the sell-off, primarily due to concerns surrounding artificial intelligence that are driving investors toward less overvalued sectors. Tesla shares slipped by 4% in premarket trading, dipping below the $400 mark after experiencing its poorest performance since July. Similarly, Nvidia’s stock took a hit, decreasing by 3%.
The cryptocurrency market also faced pressures, with Bitcoin falling below $96,000 for the first time in over half a year. This represents a decline of more than 20% since its peak in October.
The prevailing sentiment remains pessimistic as fears escalate that the Federal Reserve may temper its approach to policy easing. The tone among Fed officials has become increasingly hawkish, and traders now anticipate less than a 50% likelihood of a quarter-point rate cut next month, a stark contrast to roughly 95% just a month prior. Minneapolis Fed President Neel Kashkari has expressed skepticism about the prospect of rate cuts, citing resilience in the U.S. economy and ongoing inflation concerns.
Compounding these worries is the uncertainty surrounding economic data following the record six-week federal shutdown. Policymakers are left without insights into both price pressures and the job market, raising questions about how forthcoming data will be presented now that the government has resumed operations.
In an effort to address rising food costs, which have become a point of concern for voters in recent state and local elections, President Trump is preparing to implement significant cuts to tariffs. The administration is also pursuing trade agreements with countries like Argentina and Brazil to make essential products such as bananas and coffee more affordable.
This complex economic landscape highlights ongoing challenges as investors navigate fluctuating market conditions, while policymakers seek ways to stabilize the economy amid uncertain indicators and inflationary pressures.